New York sales tax collection posts 2nd straight strong month
(The Center Square) – New York received a double dose of good economic news over the past two days.
State Comptroller Thomas DiNapoli announced Wednesday local sales tax collections amounted to $1.4 billion in May. While that is down slightly from April’s $1.5 billion collection, it’s a turnaround from last year’s collection in May, when businesses were hampered by the COVID-19 pandemic.
Collections grew by $530 million from last May, and a statement from the comptroller’s office said the 57.8% increase was the highest one-month jump in recent history.
“For the second straight month, local sales tax collections had a tremendous boost. Strong collections in May show the economy continues to improve as spending rebounds from the effects of the COVID-19 pandemic and the standstill it created in New York state in March 2020,” DiNapoli said. “Combined with direct federal assistance and restored state aid, the recovery of sales taxes will help New York’s local governments rebound from the effects of last year’s revenue shortfalls.”
Compared with prepandemic figures, the May 2021 total represents a $93 million increase from the May 2019 total.
New York City accounted for $636 million in sales tax revenue, seeing its total increase by 51.4% – or $216 million – from May 2020. The largest percentage increase came in Allegany County, which saw its collections jump $88.2 million.
For the first five months of the year, the state has collected $7.2 billion in sales taxes, a 12.9% increase over the same timeframe in 2019.
All regions have shown year-to-year growth, but New York City at $3 billion is the only region not to show a double-digit increase in the year-to-date total. The Big Apple’s collections have grown by 4.8% from last year.
The strong sales tax collections report comes a day after DiNapoli said overall tax revenues have increased for the start of the fiscal year, which began in April. Those receipts, which total $20.9 billion, are $4 billion more than budget projections, he said Tuesday in a statement.
DiNapoli said the “unprecedented infusion” of federal funds from COVID-19 stimulus packages has given support to the economy and the early tax collections are a reason for optimism.
“Still, economic uncertainties remain and caution is warranted going forward,” DiNapoli said.
The tax reports aren’t the only good news the state’s received about its financial outlook in recent days. Fitch Ratings assigned an AA+ grade to New York State general-purpose bonds Friday and revised its ratings outlook from negative to stable.
The agency said the change was warranted because of the progress the state’s economy has made since the start of the pandemic.
“Although the state economy is likely to lag national medians for recovery, the massive influx of direct aid and economic stimulus from federal actions, including the American Rescue Plan Act (ARPA), is bolstering the state’s rebound and will provide material, albeit temporary, fiscal support to New York State,” the agency said.
S&P Global Ratings made a similar change Friday to New York’s financial outlook.
New York Gov. Andrew Cuomo said Monday he was encouraged by the rating agencies’ recognition of the state efforts.
“Coupled with a decade of fiscal integrity preceding the pandemic, an economic recovery that’s beating expectations thanks to our nation-leading vaccination programs, and hard fought-for federal funding, New York State is today emerging from this unprecedented crisis on firm financial footing,” the governor said in a statement.
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